NZD/USD Weekly Price Forecast – New Zealand dollar breaks down during the week

The New Zealand dollar has broken down during the week, slicing through the 0.70 level. In fact, we have even broken down below the 0.6950 level. The 0.68 level underneath is the bottom of a longer-term consolidation area as you can see marked on my chart by a purple box, and a break down below that level would be very negative. I think that if we break down below that level, it’s likely that we could go down to the 0.65 level over the longer-term. However, if we rally from here it’s likely that the market taking out the top of the weekly candle that we just formed, we could then go to the 0.72 handle.

The market continues to be very noisy, and it is still essentially range bound. However, this last week shows a lot of negativity, and of course concern when it comes to trade wars starting to heat up again. If that’s the case, especially considering it’s the United States and China we are discussing here, the New Zealand economy will be directly affected as it sends most of its agricultural exports to China and other parts of Asia. Beyond that, the New Zealand dollar is considered to be a “risk on” currency as well, as it has a higher interest rate attached to it. I believe that it’s likely that we will continue to see selling pressure, but if there is some type of conciliatory tone struck between the Americans and the Chinese, we could see a rapid turnaround.